Paycheck Fairness Act

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AIM opposes the so-called Paycheck Fairness Act pending in Congress because the measure would unleash a mountain of litigation against employers working in good faith to provide opportunity to all employees.

The U.S. Senate has voted down the bill twice in two years.

The legislation would allow unlimited punitive and compensatory damages in cases of suspected pay discrimination. Employers of all sizes would be exposed to increased litigation and a spate of frivolous class-action suits even when they act with a reasonable belief that their pay policies are lawful.

AIM opposes the Paycheck Fairness Act because:

  • It would remove the Equal Pay Act caps on punitive and compensatory damages and would apply punitive damages to all cases.
  • It would also eliminate a key justification for pay disparities by requiring that any difference in pay be substantiated as a “business necessity.” Additionally, these defenses would have to be based on “bona fide” factors and would prevent employers from paying employees in different localities different rates.
  • It would make it easier for plaintiffs’ attorneys to file class-action suits against employers by requiring participants to “opt-out” of equal pay class-action suits. Currently, claimants must “opt-in” to suits if they wish to be part of the class.
  • It would require that the government collect information on employee wages and other data. This would also enable confidential salary information to be publicly shared with employees’ coworkers, competitors and others. In addition, the bill would allow the Equal Employment Opportunity Commission (EEOC) to require employers to report sensitive wage information that may be publicly disclosed.
AIM Expert:
Brad MacDougall
Vice President
Government Affairs

Paycheck Fairness Act
paycheck fairness act, paycheck fairness
Information on how the Paycheck Fairness Act is potentially allowing unlimited punitive and compensatory damages in cases of suspected pay discrimination.